Question : Choose Which of the following statements is incorrect in respect of goodwill?
Option 1: Fictitious asset
Option 2: An intangible asset
Option 3: Both 1 and 2
Option 4: None of the above
Answer (1)
23rd Jan, 2024
Correct Answer: Fictitious asset
Solution : Answer = Fictitious asset
Goodwill is not a fictitious asset; it is a genuine intangible asset representing the reputation, brand value, and customer loyalty of a business. It's recognized on the balance sheet when a company is acquired for a price greater than the fair market value of its net assets.
Hence, the correct option is 1.
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